06.27.11

Last week’s Brattle Group report for LightSquared, not only highlights the regulatory “gift” from the FCC involved in their January 2011 waiver, but also contains an estimated value of $12B for LightSquared’s L-band spectrum. This valuation is derived by assuming that LightSquared’s terrestrial-only waiver means its spectrum should have an equivalent value to “unencumbered AWS wireless broadband spectrum”, which Brattle believes to be worth approximately $1.00 per MHzPOP.

Unfortunately, this valuation, which is derived from an April 2011 Brattle Group analysis, is also deeply flawed. As an aside, it is almost identical to the valuation put on LightSquared (then MSV) by Brattle back in October 2005, when they estimated that 30MHz of MSS-ATC spectrum had a “potential” value of $0.99 per MHzPOP (although ironically, at that point it was asserted that “there are questions regarding interference and other technical issues that potentially make L-band use for ATC problematic, which would require L-band spectrum to be priced at a discount to S-band spectrum”).

The most obvious problem with Brattle’s valuation of LightSquared’s spectrum is that is is just as inappropriate to use AWS spectrum as the sole benchmark for L-band valuation today, as it was to use PCS as the benchmark in October 2005. Today the AWS-1 block has substantial existing infrastructure already deployed (both base stations and handsets) which can readily make use of the spectrum, whereas LightSquared was not even able to provide test handsets or full power base stations for the recent Las Vegas testing.

In addition, there are also more subtle issues which render the AWS value in the April 2011 paper unreliable. Notably, Brattle estimates trends in spectrum pricing by reference to a spectrum price index created and maintained by Spectrum Bridge. Brattle suggests that the index “tracks changes in spectrum value reasonably well” because as one example, “the change in SpecEx Index values closely tracked the change in AWS spectrum value based on NextWave’s AWS spectrum sale to T-Mobile in July 2008. The NextWave sale reflected a 91% increase in AWS spectrum value, whereas, the SpecEx Index in the same period indicated an 86% increase in spectrum value.”

However, the cited transaction reflects the sale of spectrum which by July 2008 could be readily put into use in T-Mobile’s built-out AWS-1 network, compared to spectrum which in summer 2006 had not even been cleared of interference. It is as if I bought some farmland and then a developer put in utilities and roads on the adjacent tract of land. The value of my particular plot might have increased, but that would say nothing about the market price of farmland. In spectrum terms, no-one (including Brattle) would suggest that Aloha’s windfall on sale of its 700MHz spectrum to AT&T was largely due to a general increase in the value of spectrum, as opposed to the DTV transition and the 700MHz auction creating certainty about whether the spectrum could be put to use.

A second factor is that of survivorship bias: in the cited NextWave transaction, NextWave’s AWS holdings were sold because the offered price was acceptable (higher than the original price paid), but NextWave failed to sell its 2.3GHz and 2.5GHz spectrum holdings which were on offer at the same time (because the offers, assuming there were any, were too low). Spectrum Bridge claims that its index takes account not only transaction data but also a “custom weighting of value, spectrum, and macro-economic based factors driven by SBI’s valuation and trading data”. However, this inevitably obscures the methodology and makes it all but impossible to determine whether the index accurately tracks spectrum values.

Returning to my farmland analogy, it would seem that the most important factors in attempting to exclude both “improvement” and “survivorship” bias would be that (for currently unused spectrum) the ecosystem for use of the spectrum should not have changed dramatically in the intervening years, and the timing of the sale should be dictated by external events (e.g. a bankruptcy auction) rather than by whether or not the prior holder can make a profit over what it paid previously. In that context, the recent sale of DBSD and the current auction of TerreStar almost certainly provide a better indicator for trends in the value of LightSquared’s spectrum than the index used by Brattle.

At current levels (of roughly $0.25 per MHzPOP), DBSD and TerreStar’s spectrum has actually gone down in value compared to 2005 and is broadly similar to the trading price (and the Motient/SkyTerra exchange valuation) back in 2006 (before most of their satellite construction expenses were incurred and well before the spectrum could be brought into use). This compares to a SpecEx index which has doubled since mid 2006 and trebled since 2005.

If (perhaps optimistically) we assumed that LightSquared’s spectrum with the terrestrial-only waiver is similar to AWS-1 spectrum when it was auctioned in 2006, then based on the DBSD/TerreStar trend (of minimal change in price since 2006) the AWS-1 auction pricing ($0.54 per MHzPOP) might be an appropriate valuation to use. On the other hand, if DBSD and TerreStar also include in their current valuation some allowance for the possibility that the FCC might also grant them a waiver (so are more directly analogous to LightSquared), then their $0.25 per MHzPOP valuation might be more appropriate.

In order to come up with an actual dollar valuation of LightSquared’s spectrum assets, you then need to take into account the impact of interference (i.e. whether to use 20MHz or 40MHz as the basis of valuation) and the NPV of the Inmarsat payments (where a relatively low (8%?) discount rate would probably be used by any established wireless operator purchasing this spectrum).

At the low end (20MHz @$0.25 per MHzPOP), you come out with a negative valuation after the Inmarsat payments (minimal value for the first lien debtholders), whereas at the high end (40MHz @$0.54 per MHzPOP) you have a valuation of about $4B (before paying off the first lien debt). That’s why I said that “It is very hard to see how you justify an equity value for this business (in line with) what Harbinger has invested, unless it can show it will be able to use all the spectrum it owns”.

06.24.11

As the Shakespearian drama (or should that be tragedy?) of LightSquared’s battle over GPS interference plays out, the question arises as to what is the contingency plan if Congress or the FCC prevents LightSquared from operating? This issue came up indirectly in yesterday’s House subcommittee hearing, where LightSquared indicated that if there is “extraordinary action taken on a legislative or regulatory basis as result of this [GPS industry opposition] and we are not allowed to try to work this out on a cooperative basis, … certainty about spectrum and the valuation of spectrum will be severely undermined in this country.”

This answer seems to hint at one possible outcome, where LightSquared might sue the government and/or FCC for compensation, if “extraordinary action” prevented LightSquared from operating its network under the waiver granted in January. Another possible action on LightSquared’s part might be to withdraw the waiver request and simply try to operate under the prior March 2010 Order, although it is hard to imagine that the FCC could allow such operations to go forward (at least under the Phase 0, 1 or 2 plans) when LightSquared has admitted that its original plans would interfere with GPS. In particular, LightSquared’s March 2010 ATC authorization is conditioned on continuing “to work with the DoD in order to resolve the DoD’s concerns” and more generally, the FCC’s regulations require that “If harmful interference is caused to other services by ancillary MSS ATC operations, either from ATC base stations or mobile terminals, the MSS ATC operator must resolve any such interference”. However, it is notable that the FCC was prepared to override the complaints of Amtech and Skywave that this rule should protect their existing FCC-authorized operations when it approved SkyTerra’s ATC modifications in March 2010.

Nevertheless, the litigation path appears (at least on its face) to be a more plausible option for LightSquared to pursue, claiming that restrictions imposed by such “extraordinary action” would be an unconstitutional “taking” of their property rights. After all, NextWave had considerable success with its claim against the FCC a few years ago. Otherwise it is hard to see why LightSquared would sponsor yesterday’s study by the Brattle Group claiming that “LightSquared’s proposed 4G terrestrial LTE network will create approximately $12 billion in direct economic value to the economy”.

Astonishingly, the basis for this value (as per footnote 2 stating that “the economic value for LightSquared’s 40 MHz of nationwide L band spectrum dedicated to terrestrial broadband is approximately $12 billion”) is that $12 billion is the price that Brattle estimate uncumbered terrestrial spectrum in this band would supposedly sell for in an FCC auction (although I would suggest that is far too optimistic). The same study also estimates that 50MHz of satellite spectrum (for GPS) would only be worth $2B and highlights the relatively lower values that DBSD and TerreStar (who have not been granted a waiver to permit terrestrial-only service, even though both companies have ATC licenses) are selling for. Thus Brattle’s analysis is directly implying that the FCC’s January 2011 waiver was a regulatory gift to LightSquared worth $10 billion, something that at this point in time could well act as a red flag to the Congressional bull, but could easily form the basis of a demand for compensation if LightSquared cannot move forward. (Ironically the press release accompanying the report highlighted that the GPS industry had supposedly benefited to the tune of $18B from free access to the GPS system).

In the end, therefore, I wonder if the final act of this play might be the diametric opposite of another Shakespeare quote: “First hire all the lawyers”.

06.23.11

The outcome of today’s joint subcommittee hearing of the House Committee on Transportation and Infrastructure was not a great surprise, with all witnesses (with the exception of LightSquared) and the chairman of the aviation subcommittee insisting that “comprehensive new tests” are needed to “make sure the [FCC] is not approving a system that would pose risks to aviation safety”. On the other hand, LightSquared stated that it “is optimistic that this further analysis [of interference to aviation] can be concluded in the next few weeks” and proposed that it “will commence terrestrial commercial operations only on those portions of its spectrum that pose no risk to the vast majority of GPS users”. LightSquared also stated that it “is prepared to underwrite the development of filtering technology for new receivers that can then be used consistently with the placement of our network” (although of course it is not offering to pay for the upgrading or replacement of the $3 billion+ of precision agricultural equipment that would be necessary to actually deploy these filters). However, it is inconceivable that the FAA and DoD would agree to just a few more weeks of testing, and a minimum of three to six additional months of testing (plus a subsequent consultation period) now seems far more plausible.

As a result, it appears LightSquared will now have to look elsewhere for downlink spectrum to replace the upper L-band block. However, LightSquared has now indicated that it intends to submit the GPS interference report to the FCC on June 29, apparently pouring cold water on the idea that it might intend to bid for TerreStar in the bankruptcy auction on June 30. However, I note that there is one convenient block of spectrum that could provide an alternative downlink, namely the unpaired AWS-3 spectrum (2155-2175MHz) which is part of the FCC’s current 2GHz consultation, and on which comments are now due July 8.

Of course, with Congress and the FCC seeking to raise $20B to $30B from spectrum auctions to pay for a national public safety network, giving away this spectrum for free to bail out a hedge fund manager might prove politically difficult. Even a couple of years ago, the prospects of M2Z building a free national wireless broadband network were not sufficient for the FCC to award this spectrum for free. However, as a less controversial alternative, auctioning downlink-only spectrum with strong buildout conditions (in line with those already committed to by LightSquared) might lower the selling price to a level at which Harbinger could conceivably afford to acquire this spectrum (if it is around to do so in a couple of years time when such an auction would actually take place).

06.21.11

Yesterday’s announcement that LightSquared plans to use the lower 2x10MHz block of its L-band spectrum (1526-1536MHz downlink, paired with 1627.5-1637.5MHz uplink) for initial operations, leaves a number of questions unanswered. In particular, the most critical issue is when Inmarsat will make this block of spectrum available. Half of the spectrum (1526-1531MHz downlink) was part of the Phase 1A plan, which was part of the rebanding plan that LightSquared was paying Inmarsat $250M to undertake, and completion was scheduled for February 2012, though Inmarsat also potentially could have extended this date by 9 months in the event of an “excusable delay”. The other half of the block (1531-36MHz downlink) was part of the Phase 2 spectrum leased by Inmarsat to LightSquared for $115M per year, which was scheduled to be available in July 2013.

Inmarsat has indicated that under the amendment to the Cooperation Agreement signed on April 25, for which LightSquared paid an additional $40M, it will work to make this lower block of Phase 2 spectrum available somewhat earlier than July 2013. It is also possible (although unconfirmed) that Inmarsat may reduce the amount of potential excusable delay in making the Phase 1A spectrum available.

LightSquared has indicated that it plans to “be able to test its service in early 2012 and launch commercial services around mid 2012″. This would presumably imply testing in the Phase 1A 2x5MHz block and launching commercial service in the 2x10MHz block, i.e. Inmarsat would have no excusable delay in making the Phase 1A spectrum available and would advance the Phase 2 lower block spectrum availability by roughly one year. However, the lack of clarity around definitive dates tends to suggest that Inmarsat will be making “best efforts” to move up the Phase 2 spectrum availability but has not made any definitive commitment that it will be able to do so.

This would not be surprising, because Inmarsat has to accommodate its maritime and aeronautical customers who rely on its satellite network for distress and safety services (GMDSS) by fitting filters to these devices. I understand that Inmarsat-C GMDSS terminals use a block of spectrum around 1537-38MHz for their safety-critical communications (basically broadcasting distress messages and other alerts from the Inmarsat satellite to ships in the surrounding area), and I was told that some of Inmarsat’s terminals using this spectrum may not be frequency agile. Even if they are (per the comment below), then after the Phase 2 migration Inmarsat will concentrate its satellite operations within the 1536-45MHz range and so the 1531-36MHz downlink block has the highest potential for interference with these safety services.

Inmarsat also plans to close its Aero H and I services, which are apparently not compatible with LightSquared’s operations, and transition these customers to SwiftBroadband safety services (which will be better protected from interference). However, the SBB safety services are only expected to start flight trials in early 2013, which would then lead to safety certification during 2014. Whether this timetable is compatible with making the Phase 2 spectrum available at an earlier date is also unclear. Notably I understand that there may be as many as 1000 US government aircraft that rely on Aero H in North America, and so there may be considerable pushback if these users are forced to transition without either compensation or an approved alternative aeronautical safety service.

With respect to Inmarsat’s land services, there is no intention to protect these services (which include the John Deere Starfire GPS augmentation broadcasts that use the Inmarsat satellites). In fact I’m told that Inmarsat is specifically prohibited by the terms of its agreement with LightSquared from fitting filters to its land terminals to allow them to operate in the presence of LightSquared interference. The reason for this is that the uplinks from Inmarsat’s relatively high powered satellite terminals (such as BGAN or ISatPhone Pro) could produce significant interference to the sensitive LightSquared receivers on its terrestrial towers if they were to operate within range of a LightSquared base station. However, without an input filter these terminals will be overloaded by the terrestrial LightSquared signal and will shut down, thus preventing them from transmitting and causing interference to LightSquared.

06.20.11

LightSquared has now announced (as I predicted) that it plans to restrict initial operations to the lower 2x10MHz block of L-band spectrum as “a comprehensive solution to the problem of interference with Global Positioning System (GPS) receivers”. This follows last week’s letter to the FCC, indicating that “among the main reasons” for the delay in submitting the June 15 final report was that “based on preliminary test results, LightSquared determined that additional testing, beyond what had been planned initially, including alternative frequency plans to support its network roll-out, was necessary to permit a proper evaluation of various mitigation options for addressing the GPS receiver overload issue”.

In reality, LightSquared’s press release and FCC letter appear to obfuscate what has happened, because LightSquared’s renegotiation with Inmarsat was actually completed two months ago, and signed on April 25, as was revealed in Inmarsat’s Q1 results. Thus LightSquared devised this new plan at a time when (according to the second Working Group progress report filed April 15), many of the test plans had not even been completed (although it was clear to knowledgeable observers as early as March that operation in the upper band was unlikely to be feasible).

LightSquared’s press release does indicate some further detail about the nature of that renegotiation with Inmarsat (which involved LightSquared making an additional payment of $40M to Inmarsat). Specifically, it seems possible that Inmarsat may not only be removing its 9 months of excusable delay (Inmarsat was scheduled to make the spectrum available in February 2012, but had 9 additional months of potential excusable delay extending to November 2012) in making the 2x5MHz Phase 1A Channel 1 spectrum available (1526-1531MHz downlink), but it appears that LightSquared may have access to the full 2x10MHz Phase 2 Channel 1 spectrum (1526-1536MHz downlink) spectrum sooner as well (it was originally agreed that is would be made available in July 2013). This is reflected in LightSquared’s ambition to be able “to rent space to commercial service providers as soon as the middle of 2012″ under the revised plan (although that of course is yet another delay from the “early 2012″ we heard only a month ago).

Of course the key issue is that as I’ve previously highlighted, with only 20MHz of usable spectrum for its terrestrial network, it is very hard for Harbinger to justify its LightSquared equity investments (or raise additional money), when there is a $2B+ lease obligation to Inmarsat ($115M per year increasing at 3%) and $1.5B of first lien debt ahead of them. This is especially clear now that both DBSD and TerreStar are being sold in bankruptcy court (each with 20MHz of spectrum) for less than $1.5B apiece.

As a result, it is far from clear whether whatever conditions Sprint has imposed to move forward with the network sharing agreement can and will be met. Unsurprisingly LightSquared therefore insists that over “the next several years” it will “work closely with the FCC and the NTIA, as well as the relevant US government agencies and commercial GPS users, to explore mitigation possibilities and operational alternatives that will allow LightSquared to continue to expand its business” (i.e. persuade the FCC to mandate the rapid introduction of receiver standards so that it can use the upper L-band spectrum).

06.19.11

What would you know? I go camping for a weekend, and suddenly we have a $20 billion network sharing “deal” between Sprint and LightSquared “to share network expansion costs and equipment, and to provide high-speed wireless service to the phone company” described in a leaked letter to “Harbinger Capital Partners hedge fund investors”. This seems like a very peculiar way to reveal such a ground-breaking deal, especially as Sprint notably declined to comment on whether or not a deal had been signed, and there is little clarity about whether this is a new deal or simply the same “accord” that was reached some time ago.

Regardless, the obvious question is what conditions remain to be satisfied, before Sprint actually moves forward with the buildout. As I’ve noted before, it is critical that Sprint gains sufficient security to cover its upfront costs, either from rights to LightSquared’s spectrum assets or LightSquared raising additional cash through an IPO. However, a near term IPO looks like a stretch, and it is unclear whether the second lien spectrum rights granted this week are sufficient to satisfy Sprint. Also LightSquared obviously needs to resolve the GPS interference issues, so it can actually use its spectrum. If the leaking of this deal (presumably by Harbinger) serves to plunge Sprint into the firestorm of the GPS interference debate, then it will be very interesting to see whether Sprint decides to actively support LightSquared or takes a more neutral position with the FCC and Congress.

However, all that is somewhat of an aside to the real purpose of this post. My camping trip was only 40 minutes away from my home in Silicon Valley, but in an area with absolutely no cellphone coverage. Wouldn’t it have been great to have one of LightSquared’s new dual mode satellite phones (if and when they come to market) so I could have had a connection to the real world that would have allowed me to hear about the breaking news? Unfortunately not, because when I looked up at the sky, all I could see was trees, and as with any MSS network, you need a line of sight to the satellite to be able to make or receive a call.

TerreStar’s Genus satellite phone has proven to be a complete disaster, despite the expectation that there would be vast global demand for these phones. As a result, I wonder if some of the commentators in the LightSquared proceeding really have any idea what they would be getting from the LightSquared network in rural areas (after all, a terrestrial network covering 92% of the population will leave at least 25M people relying on satellite coverage).

For example, this letter asks us to “think of Native American communities who do not even have basic cellphone service now but would with this network” and this letter notes how the “new super-fast broadband wireless network that is backed up by satellite communications…would provide our staff seamless connectivity even in extremely remote locations”. However, that’s hardly surprising when we are told how you’ll have voice connectivity and can get your e-mails “no matter where you are, if you step out of your car, in the Yellowstone National Park” (where there’s also an awful lot of trees and mountains) or “in the middle of Grand Canyon” (pretty difficult when there’s a 5000ft cliff to your south). Haven’t we heard that one somewhere before?

However, it also seems the probability is rising that a national public safety network will soon be built out in the D-block, after yesterday’s White House event to push a combined incentive auction/public safety bill. As a result, I have to wonder if some of Sprint’s apparent indecision about network sharing with either Clearwire or LightSquared is prompted by the possibility that a network sharing customer who is unlikely to go bankrupt might emerge, in the shape of this national public safety network.

Indeed the purported $2B per year LightSquared agreement could easily provide a template for such a rollout (albeit probably without Sprint being able to use capacity on the public safety network). In particular, the spreading of costs that is part of that agreement might help to reduce concerns in the public safety community about the buildout potentially being delayed, if incentive auction-based funding is not available for several years.

Thus, if signs do now emerge that the government may offer to assist in defraying some of Sprint’s Network Vision buildout costs, both Clearwire and LightSquared might be left to ponder the truth of the statement that the nine most terrifying words in the English language are “I’m from the government and I’m here to help”.

However, this action has left the GPS industry furious after their enormous efforts to accommodate LightSquared’s aggressive timetable (set at LightSquared’s insistence so it could “continue to roll out our network and meet the rigorous construction timetable that the Commission has made a condition of our authorization,” a promise that it has not exactly been keeping).

As a result it would not be in the least surprising if some data now emerges, and indeed Communications Daily is already reporting on a leaked copy of the General Location/Navigation subgroup report, which “concluded that all phases of the LightSquared deployment plan will result in widespread harmful interference to GPS signals and service and that mitigation is not possible,” despite the fact that “no stone was left unturned as the team evaluated proposals for mitigation options involving both LightSquared’s transmitters and GPS receivers.”

The National Public Safety Telecommunications Council (NPSTC) has also filed details with the FCC on their portion of the test results (which notes that some public safety applications would see “vast service outages”) and I wonder how many other subgroups will now also decide to make available their own contributions to the Working Group report, either through the FCC docket or through leaks to journalists or Congress?

Its now being reported that LightSquared plans to ask the FCC for an extension of today’s deadline for submitting its report on GPS interference until July 1, as the company is apparently claiming that “all the information required for the report had not yet been submitted”.

However, the supposed new target date of July 1 conveniently just happens to be the day after the rescheduled June 30 auction for TerreStar Networks. It seems a huge stretch to imagine that this is purely a coincidence, when DISH blocked Harbinger’s attempts to secure access to the TerreStar spectrum last night, which I understand was the cornerstone of Harbinger’s planned “2GHz first” strategy, that first emerged back in March. Its also pretty hard to explain why it would take another two weeks simply to compile the report, given that the tests were apparently completed a couple of weeks ago.

UPDATE: One reason unrelated to TerreStar is that it could be fairly convenient for LightSquared to bury the report on the Friday of a holiday weekend.

Now the question is whether the GPS industry (who want LightSquared to move to different spectrum although perhaps did not expect that to actually happen) and the FCC will play ball and allow the deadline to be postponed. If that happens then Harbinger will have two weeks to either put together a superior bid (presumably with MetroPCS) for TerreStar, or to strike a network sharing deal with Sprint (if today’s first lien debt amendment proves sufficient to persuade Sprint that they have adequate security). Depending on which path proves successful (if indeed either one does), LightSquared will then know if it can propose using 2GHz spectrum initially, or if it will need to try and defend its L-band spectrum rights to the death.

UPDATE: LightSquared has filed the request for an extension until July 1, which has been granted almost immediately by the FCC. I am told that other members of the Working Group (with the exception of Sprint) opposed LightSquared’s request for an extension, and a filing to this effect has now appeared in the IB docket. Today the National Public Safety Telecommunications Council (NPSTC) also filed comments detailing their portion of the test results, noting that some public safety applications would see “vast service outages” and suggesting use of the 2GHz MSS spectrum for downlinks paired with L-band uplinks as one (albeit somewhat impractical) alternative to prevent interference.

In particular, in the event of default, Sprint would apparently have to pay off the $1.5B of first lien debt and would also presumably need to keep the Spectrum Cooperation Agreement with Inmarsat in place, which involves payments of $115M per year (increasing at an annual rate of 3%) plus additional rebanding payments over the next year. Thus the effective cost to Sprint of acquiring LightSquared’s spectrum assets would be in the region of $3.5B-$4B (the NPV of the Inmarsat payments is $2B+).

That might not be too unreasonable if LightSquared had access to 40MHz of LTE-capable spectrum in the L-band (though it is somewhat higher than the current combined price of $2.86B being offered by DISH for DBSD and TerreStar), but if the FCC declines to grant LightSquared the ability to use the upper part of the L-band spectrum, in the face of the major GPS interference problems apparently found in that part of the band, it looks utterly unrealistic for what would then only be about 20MHz of LTE-capable spectrum at best.

Its also worth noting that if LightSquared decided to terminate the lease agreement with Inmarsat, after the first five years of lease payments are made, then under current arrangements it would only have access to the Phase 1 spectrum (i.e. 2x5MHz in the lower L-band and 2x5MHz in the upper L-band). If LightSquared terminated the agreement with Inmarsat without making five years of lease payments, then the default spectrum allocation would go back to even less usable spectrum, probably resembling something like the Phase 0 allocation (i.e. only 2x5MHz in the upper L-band). As a result, there is certainly no benefit to LightSquared (or Sprint) in trying to get out of the Inmarsat agreement and expecting that there will still be 20MHz of LTE-capable spectrum that doesn’t interfere with GPS.

Thus, while the amendment to LightSquared’s first lien debt agreement points the way to a potential deal with Sprint, the GPS issues might still prevent the network sharing agreement being consummated. Of course, even if the Sprint deal does go through, this agreement also increases the likelihood that Harbinger’s equity investments in LightSquared will ultimately be worthless, because if LightSquared is unable to raise additional equity funding to pay its obligations to Sprint under the network sharing agreement, Sprint would then have a (presumably substantial) claim on the LightSquared assets before LightSquared’s equity holders saw any proceeds.